M/s. Mewat Grit Udyog, Rewari v. ACIT, Faridabad

ITA 4141/DEL/2011 | 2007-2008
Pronouncement Date: 29-03-2012 | Result: Allowed

Appeal Details

RSA Number 414120114 RSA 2011
Bench Delhi
Appeal Number ITA 4141/DEL/2011
Duration Of Justice 6 month(s) 15 day(s)
Appellant M/s. Mewat Grit Udyog, Rewari
Respondent ACIT, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 29-03-2012
Date Of Final Hearing 29-03-2012
Next Hearing Date 29-03-2012
Assessment Year 2007-2008
Appeal Filed On 13-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO.4140 & 4141/DEL/2011 ASSESSMENT YEARS : 2006-07 & 07-08 MEWAT GRIT UDYOG BEHIND PNB BUILDING QUTUBPUR REWARI. VS. ACIT CENTRAL CIRCLE-II FARIDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI R.S. NEGI SR.DR ORDER PER I.P. BANSAL JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND THEY AR E DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE CIT ( A) DATED 1 ST JULY 2011 FOR ASSESSMENT YEAR 2006-07 & 2007-08. THE GROUNDS OF APPEAL IN BOTH THE APPEALS ARE IDENTICAL AND READ AS UNDER:- 1. THE LOWER AUTHORITIES HAD ERRED IN IMPOSING THE PE NALTY U/S 271B. 2. THE LOWER AUTHORITIES COULD NOT VALIDLY IMPOSE THE PE NALTY ON THE ASSESSEE UNDER SECTION 271B AS THE DELAY N SUBM ISSION OF THE AUDIT REPORT UNDER SECTION 44AB WAS NOT DUE TO THE FAULT OF THE ASSESSEE. 3. THE ASSESSING OFFICER WAS CLEARLY WRONG IN IMPOS ING A PENALTY ON THE ASSESSEE UNDER SECTION 271B OF THE IT AC T 1961. 4. THE ORDERS OF THE LOWER AUTHORITIES BEING ARBITRARY ERRONEOUS AND ILLEGAL IT DESERVES TO BE MODIFIED. T HE SAME MAY KINDLY BE MODIFIED. ITA NOS.4140 & 4141/DEL/2011 2 2. THE PENALTY IMPOSED U/S 271B FOR BOTH THE YEARS IS A SUM OF ` 1 LAC FOR EACH ASSESSMENT YEAR. FOR ASSESSMENT YEAR 2006-07 THE OBLIGATION OF THE ASSESSEE TO FILE THE AUDIT REPORT WAS UPTO 31 ST OCTOBER 2006 AS AGAINST THAT IT HAS BEEN FURNISHED ON 31 ST MARCH 2007. THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY PEN ALTY U/S 271B SHOULD NOT BE IMPOSED. IT WAS SUBMITTED THAT A SEA RCH OPERATION WAS CARRIED OUT ON THE ASSESSEE ON 24 TH AUGUST 2006 DURING WHICH LARGE NUMBER OF DOCUMENTS WERE FOUND AND SEIZED AND P HOTO COPY OF THOSE DOCUMENTS WERE MADE AVAILABLE TO THE ASSESSEE ONLY IN JUNE 2007. THE ACCOUNTANT OF THE FIRM HAD LEFT THE JOB. THE ASSESSING OFFICER DID NOT BELIEVE SUCH EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE AUDIT REPORT WAS SIGNED BY THE ACCOUNTANT ON 11 TH AUGUST 2006 I.E. 20 DAYS BEFORE THE SPECIFIED DUE DATE FOR FURNISHING THE AUDIT REPORT AND THUS AS THE AUDIT REPORT WAS READY THE A SSESSEE HAD NO REASONS TO FILE THE AUDITED ACCOUNT BELATEDLY. THE A SSESSEE ALSO SUBMITTED THAT IT WAS PREVENTED FROM DISCHARGING ITS STA TUTORY OBLIGATIONS AS PRESCRIBED U/S 44AB DUE TO PERENNIAL ILL NESS OF ITS ADVOCATE AND THE ASSESSING OFFICER DISBELIEVED THIS EXPLA NATION OF THE ASSESSEE ON THE GROUND THAT HOW THE ILLNESS OF AN ADVOCAT E CAN AFFECT THE FUNCTIONS OF THE ACCOUNTANT/AUDITOR OF THE ASSESSEE AND IN THIS MANNER PENALTY OF ` 1 LAC HAS BEEN IMPOSED. 3. SIMILARLY FOR ASSESSMENT YEAR 2007-08 THE LAST DATE TO FURNISH THE AUDIT REPORT WAS 31 ST OCTOBER 2007. IT WAS FURNISHED ON 31 ST MARCH 2008. THE EXPLANATION OF THE ASSESSEE WAS SAME A S IT WAS FOR ASSESSMENT YEAR 2006-07. IT WAS FOUND BY THE ASSESSING OFFI CER THAT AUDIT REPORT FILED DURING THE YEAR WAS SIGNED BY THE ACCOUNTANT ON 13 TH FEBRUARY 2008 THEREFORE THE ASSESSEE WAS IN POSSESSION OF THE AUDIT REPORT FOR IMMEDIATE PRECEDING ASSESSMENT YEAR AS WELL A S THE SEIZED DOCUMENTS WELL BEFORE THE DUE DATE OF FURNISHING THE AUDIT REPORT AND THEREFORE THE ASSESSING OFFICER HAS LEVIED THE PENALTY. ITA NOS.4140 & 4141/DEL/2011 3 4. LEARNED CIT (A) HAS UPHELD THE PENALTY FOR BOTH T HE YEARS. LEARNED CIT (A) HAS OBSERVED THAT FOR ASSESSMENT YEAR 200 7-08 THE ASSESSEE NEITHER GOT THE ACCOUNTS AUDITED BY THE SPECIFIE D DATE NOR HAS FILED THE SAME BY THE SAID DATE. HOWEVER FOR ASSESSM ENT YEAR 2006-07 THE ACCOUNTS WERE APPARENTLY GOT AUDITED 20 DAYS BEFORE THE SPECIFIED DATE BUT THE ASSESSEE FAILED TO FURNISH THE SA ME AS PER LAW. THEREFORE THE ACTION OF THE ASSESSING OFFICER IS JUSTIFI ED FOR BOTH THE YEARS. 5. THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE HOWEVE R NONE WAS PRESENT ON BEHALF OF THE ASSESSEE THEREFORE WE PROC EEDED TO DECIDE THESE APPEALS EX PARTE QUA THE ASSESSEE. 6. THE LEARNED DR AFTER NARRATING THE FACTS AND RELY ING UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND CIT (A) PLEADED THAT THE PENALTY HAS RIGHTLY BEEN IMPOSED AND UPHELD THEREFOR E THE ORDER OF THE CIT (A) SHOULD BE UPHELD. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE L EARNED DR. WE HAVE ALSO CAREFULLY GONE THROUGH THE PENALTY ORDE R AND THE ORDER PASSED BY THE LEARNED CIT (A). ACCORDING TO THE FACT S OF THE CASE A SEARCH ON THE ASSESSEE WAS CARRIED OUT ON 24 TH AUGUST 2006. THOUGH THE ASSESSEE HAS GOT ITS ACCOUNTS AUDITED ON 11 TH OCTOBER 2006 BUT IT IS ALSO A MATTER OF FACT THAT THE DOCUMENTS SEIZED DURI NG THE SEARCH HAVE BEEN SUPPLIED TO THE ASSESSEE ONLY IN THE MONTH OF JUNE 2007. A PRUDENT PERSON WILL WAIT TILL HE OBTAINED COPY OF TH E SEIZED DOCUMENT TO SEE THAT WHETHER OR NOT SEIZED DOCUMENTS AFFECTED H IS AUDIT REPORT OR THE ACCOUNTS. IN THIS MANNER IT CANNOT BE SAID TH AT THE ASSESSEE HAD NO REASONABLE CAUSE FOR NON-FILING OF THE AUDIT R EPORT AS THE ASSESSEE CAN BE SAID TO HAVE PREVENTED BY REASONABLE CAUSE AS IT COULD NOT OBTAIN COPY OF SEIZED DOCUMENTS FROM THE DE PARTMENT TILL ITA NOS.4140 & 4141/DEL/2011 4 JUNE 2007. HOWEVER EVEN IN THESE CIRCUMSTANCES THE ASSESSEE BEING DILIGENT HAS FILED THE AUDIT REPORT ON 31 ST MARCH 2007 SO THAT IT DOES NOT GO BEYOND THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE WE SEE NO JUSTIFICATION IN LEVY OF PENALTY FOR ASSESSMENT YE AR 2006-07. 8. NOW COMING TO THE PENALTY LEVIED FOR ASSESSMENT YEA R 2007-08 IT IS A MATTER OF FACT THAT FOR THIS YEAR THE ASSESSEE HA D NOT GOT HIS ACCOUNTS AUDITED BY THE SPECIFIED DATE AND COPY OF SEI ZED DOCUMENTS WERE SUPPLIED TO THE ASSESSEE ONLY TO JUNE 2007. THERE AFTER THE ASSESSEE HAS GOT ITS ACCOUNTS AUDITED AND THOSE HAVE BEEN F ILED ON 31 ST MARCH 2008 I.E. ALMOST IMMEDIATELY AFTER FINALISAT ION OF AUDIT ON 13.2.2008. NON-FINALIZATION OF ACCOUNTS OF EARLIER YEAR MAY HAVE CAUSED DELAY IN GETTING THE ACCOUNTS AUDITED FOR SUBSEQ UENT YEAR. THEREFORE WE ARE OF THE OPINION THAT FOR THIS YEAR ALSO THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR ITS FAILURE TO GE T ITS ACCOUNTS AUDITED BY THE SPECIFIED DATE. 9. IN VIEW OF THE ABOVE DISCUSSION FINDING THAT THERE IS NO JUSTIFICATION IN LEVY OF PENALTY WE DELETE THE PENA LTY FOR BOTH THE YEARS AND ALLOW BOTH THE APPEALS FILED BY THE ASSESSEE. 10. IN THE RESULT THE APPEALS ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.03.20 12. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30.03.2012. DK ITA NOS.4140 & 4141/DEL/2011 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES